Pensions UK has published a new report today, setting out what needs to happen in practice to enable pension schemes to invest more in UK growth assets and drive good outcomes for savers.
‘From commitment to deployment: Scaling pension fund investment in the UK economy’, marks the next stage of Pensions UK’s powering pensions work programme, with a focus on how to mobilise pension capital at scale through investable structures, better coordination across public bodies and a regulatory environment that supports long-term value.
UK pension schemes already invest an estimated £1 trillion in the UK across gilts, equities, credit and alternatives. But further growth-focused investment that works for savers can only happen if the system can deliver more pension-grade opportunities, with clear routes to market and appropriate risk-return prospects.
Drawing on evidence from across the pensions landscape, the report maps the UK pension investment system, evaluates four key public finance institutions — the British Business Bank, the National Wealth Fund, Homes England and Great British Energy — and shares case studies from the private sector showing what successful UK investment can look like in practice.
The report is being published a year on from the signing of the Mansion House Accord, a voluntary commitment by 17 of the UK’s largest pension providers to invest more in unlisted assets, both in the UK and globally. As part of that Accord, Government committed to help build a pipeline of investable opportunities. This report shows there is more work to do.
Key findings
- The system remains fragmented – despite significant policy activity, pension schemes still face a complex landscape with unclear coordination, accountability and engagement routes to investing in UK growth assets.
- Public finance institutions are at different stages of readiness – the British Business Bank has made the most tangible progress to date in creating an investable route (including through the British Growth Partnership). While other institutions show willingness, there is more work to do and Pensions UK stands ready to support this.
- There are successful Private Finance Initiatives that provide lessons – The report highlights successful case studies which showcase the structures and vehicles that work for pension schemes.
- Barriers are practical and solvable – Pensions UK members cite insufficient risk-adjusted returns, a lack of suitable opportunities and policy uncertainty as key barriers. Improved pipeline visibility, risk-sharing, and value-focused regulation can unlock further allocations.
The report is accompanied by a separate call to action for Government, regulators, public finance institutions and the pensions industry. It calls for clearer end-to-end pathways that connect pension capital to investable UK opportunities, supported by coordinated Government action, institutions that can bring scalable vehicles to market, and regulation that enables long-term investment decisions focused on value as well as cost.
Zoe Alexander, Executive Director of Policy and Advocacy at Pensions UK, said: “Pension schemes are already major investors in the UK, supporting economic growth – but more practical, co-ordinated action by Government and agencies is needed to support their efforts to keep scaling those investments. Schemes need a diverse range of investable routes that are consistent with fiduciary duty, and deliver good outcomes for savers.
“A year on from the delivery of the Mansion House Accord, this report sets out the practical steps needed so that public finance institutions, regulators and industry can work together to connect long-term pension capital with a clearer, more investable pipeline of UK opportunities.”
Commenting on the below embargoed press release from Pensions UK, Lorna Blyth, Managing Director – Investment Proposition said:
“We welcome Pensions UK’s new report, which sets out practical steps for pension schemes to increase investment in UK growth. As a founding signatory to the Mansion House Accord, we have already deployed one-third of our DC workplace private market assets in the UK, driven solely by our fiduciary duty to secure better risk-adjusted returns for members rather than by mandation.
“Ensuring clearer regulation and access to scalable pension-grade opportunities is vital. At the same time, we believe providers must retain discretion to balance risk, return and liquidity and to set allocations voluntarily in their members’ best interests.
“We urge the Government and industry to adopt pragmatic timelines and to deliver a steady pipeline of high-quality UK private market investment opportunities that are appropriate for the scale of pension assets. This is vital to optimise member outcomes and ensure long-term UK economic growth.”
George Fowler, Partner at Isio, comments on the report saying: “The conversation around DC pension investment in private markets has clearly moved on over the last 12-18 months. The industry is now broadly aligned on the role illiquid assets can play in improving long-term member outcomes and supporting UK growth, but the focus is increasingly shifting towards implementation and delivery.
“What matters now is whether schemes and providers can access genuinely investable opportunities at the right scale, with appropriate governance, liquidity management, and fee structures in place. Simply increasing allocations alone will not automatically lead to better outcomes for members.
“We are also seeing a growing recognition across the market that operational execution matters just as much as strategic ambition. Areas such as manager selection, portfolio construction, and liquidity management will ultimately determine whether these allocations succeed over the long term.
“From a DC perspective, the direction of travel is clear. The challenge now is building the infrastructure, investment vehicles, and policy environment needed to support scalable long-term investment in a way that remains consistent with fiduciary duty and delivers value for savers.”
